Fabian Company Is Considering the Purchase of a Machine That

Multiple Choice

Fabian Company is considering the purchase of a machine that will save the company $4,000 per year in operating costs for a period of 10 years.The most it should pay for the machine is equal to

A) $4,000 times the present value of an ordinary annuity for 10 periods.
B) $40,000.
C) $4,000 divided by the future value of a single sum at the end of 10 periods.
D) $4,000 times the future value of an ordinary annuity for 10 periods.